Tony Talks Business
How Beauty Brands Make Money
A lipstick costs about four dollars to make and sells for forty. The cheap brand and the luxury brand keep almost the same share of every sale. And the shop that sells them is often owned by the same company as the brand.
This is how beauty brands actually make money, and why Sephora wins whichever lipstick you pick.
The numbers in this video
90%About how much of what you pay for a lipstick is added after the factory, according to one beauty founder.Source: Racked
74.3%L'Oréal's gross margin in 2025. For every 100 euros of product it sold, making it cost less than 26.Source: L'Oréal 2025 annual results
71%The gross margin at e.l.f., the brand known for cheap make up, in its 2026 financial year. The luxury brand and the cheap brand keep almost the same share of every sale.Source: e.l.f. FY2026 results
32.2%The share of its sales L'Oréal spent on advertising and promotion in 2025.Source: L'Oréal 2025 annual results
46MMembers of Beauty Insider, Sephora's loyalty programme, worldwide at the end of 2025.Source: Forbes
$10MWhat Rhode sold in its first two days on Sephora's shelves in September 2025. The video says more than $10 million.Source: Cosmetics Business, on LVMH's 2025 results
Every number has a source
Chapters
- 0:00The Receipt
- 1:56The News
- 2:50The Tube
- 4:02The Margin
- 4:57The Advert
- 6:10The Habit
- 6:48The Family
- 7:44The Factory
- 8:37The Shop
- 9:40The Split
- 10:58The App
- 12:01The Owner
- 13:48The Face
- 15:46The Counter
- 16:37The Partner
- 18:01The Hangover
- 19:55The Verdict
Sources
18 pages the figures in this video were read from.
